Macau Bank Earnings Drop by Half in 2023

In 2023, Macau’s banks saw profits drop to MOP 6.14 billion (EUR 701.3 million), a 53.5% decrease from the previous year.

The Monetary Authority of Macau (AMCM) cites the tough last quarter as the primary cause. Banks lost MOP 4.09 billion (EUR 467.6 million) during this period.

Initially, the banks had a promising year, with profits hitting MOP 10.2 billion (EUR 1.17 billion) in the first nine months.

This was 10.2% higher than the year before. Suddenly, their fortunes reversed. A notable issue was the 11.4% fall in net interest margin, down to MOP 19.5 billion (EUR 2.23 billion).

The AMCM had raised interest rates three times in 2023, mirroring the U.S. Federal Reserve’s moves.

Still, profits dwindled. Private sector loans, a crucial revenue source, decreased by 14.2%. They amounted to MOP 1.09 trillion (EUR 125 billion).

Similarly, bank deposits fell by 3.1%, reaching MOP 1.22 trillion (EUR 139.9 billion).

Meanwhile, Macau’s economy grew by 116.1% in the first nine months of 2023, thanks to boosts from tourism and gaming.

However, the economy remained at only 77.4% of its pre-pandemic size.

Macau, a special administrative region of China, hosts two banks capable of issuing currency: the Bank of China and Banco Nacional Ultramarino (BNU).

Despite economic challenges, BNU reported a 102% increase in profits to MOP 459.9 million (EUR 53.5 million) for the first nine months of 2023.

This downturn in the banking sector underscores the ongoing challenges in Macau’s economy.

It also shows how closely linked the banking sector’s health is to the broader economic recovery.

The resurgence in tourism and gaming is promising. Yet, the banking sector’s recovery from past downturns remains gradual, affecting the overall economic revival.

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